James McPherson's Media & Politics Blog

Observations of a patriotic progressive historian, media critic & former journalist

  • By the author of The Conservative Resurgence and the Press: The Media’s Role in the Rise of the Right and of Journalism at the End of the American Century, 1965-Present. A former journalist with a Ph.D. in journalism, history and political science, McPherson is a past president of the American Journalism Historians Association and a board member for the Northwest Alliance for Responsible Media.

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Archive for March 17th, 2009

Scapegoating AIG: Big money, small change, big distraction

Posted by James McPherson on March 17, 2009

Democratic leaders are  up in arms over bonuses for AIG employees, demanding that the company not spend the money for those bonuses and/or that the money be heavily taxed. (Gee, Dems asking for higher taxes; could you give Rush Limbaugh and company a tastier cliche? Not that Rush and the GOP are any more thrilled with the bonuses, of course, even if probably virtually everyone who got one is a Republican).

Today’s complaints come a day after Barack Obama called the bonuses an “outrage” and promised to try to block them, and three days after the company promised to “scale back” the bonuses, which apparently total a whoppng $165 million. The media have jumped on the bandwagon in a big way; the top two stories on the New York Times web page as I write this are about the anger over AIG. Naturally Fox News framed the story differently, with the headline, “Lawmakers turn fire on Obama adminstration over AIG bonuses.” (Gee, four GOP Congressman critical of a Democratic president? That’s even less surprising than the Democratic tax angle.) The headline later changed to better reflect the actual story, which was mostly critical of Timothy Geithner.

It’s tough to buy AIG’s argument that payouts are needed to keep “talented executives”–after all, if they’re so talented, how come we just had to bail out their company to the tune of $170 billion? Besides, in this economy, where else could those people go? I’ve never been a big fan of big business, anyway, and why shouldn’t we all be mad at AIG?

Still, the bonuses apparentlywere paid under terms of employee contracts, which seems to go along with Republican ideas about contracts and Democratic ideas about labor. But shouldn’t there be exceptions for employees whose employer is getting government money? Especially when the bonuses are so high (at least 73 of them for more than $1 million)? And especially since those bonuses make up so much of the bailout, a whopping total of … hmm … less than one-tenth of one percent. Oh.

Keep in mind, many of those complaining about AIG are the same people who were saying (and I agreed) last week that earmarks are not an overly significant budget problem bacause they made up less than 2 percent of the $410 billion omnibus spending bill. Likewise, employee bonuses are a tiny part of the problem with the economy.

In the meantime, at least three far bigger problems still are being largely ignored as the government and the media screech about AIG, Bernie Madoff and a few other “big bidness” villains:

  1. We have no idea where most of the bailout money to various companies is going, because those in government failed to provide oversight of those funds.
  2. The media have been essentially worthless in uncovering or warning us about impending financial problems–as, sadly, comedian Jon Stewart has been forced to point out.
  3. Those in government created the policies (and lack of regulation) that led to the meltdown, and have too often skittered between hopeless and clueless since the financial meltdown began.

Focusing on those problems, of course, would bring attention to how big the financial crisis really is, and to those most responsible for both causing and solving the crisis. It’s a lot easier to scapegoat the kind of people who, not long ago, we were all being encouraged to become.

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